Tax credit bill fails on Mo. lawmakers' final day

Friday

May 17, 2013 at 3:30 PM

Missouri's legislative session was ending Friday in a familiar way, with the failure of a proposal that would have overhauled the state's costliest tax credit programs and created several new business incentives.

DAVID A. LIEB,Associated Press

Missouri's legislative session was ending Friday in a familiar way, with the failure of a proposal that would have overhauled the state's costliest tax credit programs and created several new business incentives.

Legislative leaders made a final attempt to pass the tax-credit overhaul before the mandatory 6 p.m. end of the annual session. But state Sen. Brad Lager stood in the way because of concerns that the legislation did not go far enough in reducing a tax credit liability that waived nearly $630 million of revenues last year.

A proposed 1-cent transportation sales tax also stalled Friday in the Senate under the opposition of anti-tax Republicans, who blocked the final vote necessary to refer the proposed constitutional amendment to the 2014 statewide ballot.

The failures led to a fair amount of final-day frustration among lawmakers.

This "is what people hate about this building," said Sen. Mike Kehoe, R-Jefferson City, as he conceded defeat to those blocking a vote on his transportation tax proposal.

Sen. Eric Schmitt, who championed the tax-credit overhaul, said it represented the best chance that lawmakers might ever get to reform the state's tax credit programs. But the bill failed just as similar measures have done in each of the past three annual regular sessions and in a fall 2011 special session.

"Dear Lord, every year somebody's waiting for this fairy tale scenario to drop from the sky, to have the perfect bill," bemoaned Schmitt, R-Glendale. "I have news for folks ... we don't really live in that world."

Despite the failure of those two high-profile measures, Republican legislative leaders already were declaring the session a success. They highlighted the prior passage of a potential $700 million income tax cut, new labor organization restrictions, numerous pro-gun measures, a tweak of the state's education laws governing unaccredited schools and a bill that would restock an insolvent state fund for disabled workers, among other things.

Republicans this year held their largest legislative majorities since the Civil War era.

House Speaker Tim Jones, R-Eureka, said the session "was historic in its productivity" and included the passage of "significant" and "substantial" issues.

Lawmakers repeatedly defeated Democratic Gov. Jay Nixon's top priority: a proposed Medicaid expansion that would have tapped more than $900 million of federal funds to cover about 260,000 lower-income adults under the provisions of President Barack Obama's health care law.

The tax credit overhaul also was listed as a priority by Nixon and some lawmakers when the annual session began in January. But as in the past, House and Senate members had different opinions about how greatly the state should curtail the historic and low-income housing tax credits.

The House voted 122-32 for a plan Friday that would reduce annual tax credits for large historic preservation projects to $90 million from the current cap of about $140 million. It would have imposed a $10 million cap on smaller projects, which currently are unlimited.

The measure would have gradually lowered the cap for the state's main low-income housing tax credit to $110 million annually from the current $135 million and also reduced the amount of tax credits available through a second low-income housing program.

Additionally, the legislation would have extended the expiration date on a somewhat controversial tax credit that has allowed a developer to amass a large amount of land in north St. Louis.

Overall, the legislation was projected to save the state almost $460 million over the next 15 years.

Jones called those "significant cuts." But Lager said they did not go far enough in reducing tax credits given to developers, whom he accused of exerting undue influence over House members. At one point during his Friday filibuster, Lager asserted that "the leadership in the House is corrupt."

"Just because the House continues to defend a handful of developers, a handful of donors, doesn't mean the Senate should cave to a bad deal," said Lager, R-Savannah.

The failed legislation also would have created several new incentives for businesses, including ones targeted at computer data centers, investors in startup technology companies and exporters who use Missouri airports to ship cargo to foreign countries.